SOURCE: American Small Business League

June 12, 2008 10:25 ET

Bush Officials Manipulated Court Ordered Contracting Data, According to the American Small Business League

Bush Administration Court Ordered Contracting Data Doesn't Add Up

PETALUMA, CA--(Marketwire - June 12, 2008) - The following is a statement by the American Small Business League:

On May 19, 2008, United States District Court Judge Marilyn H. Patel ruled in favor of the American Small Business League (ASBL) and ordered the Small Business Administration (SBA) to provide the ASBL with more than 10,000 pages of data that listed the names of all firms that received federal small business contracts for fiscal years 2005 and 2006.

A preliminary review of the data by the ASBL and two third party experts has uncovered hundreds of dramatic and glaring discrepancies in the data, which indicate that Bush Administration officials manipulated the data to disguise the true volume of government small business contracts that actually wound up in the hands of Fortune 500 corporations and other large businesses.

Since 2002, Bush Administration officials have consistently denied that Fortune 500 firms and other large businesses are receiving federal small business contracts. The data released by the SBA proves that some of the largest firms in the world were the actual recipients of billions of dollars in federal small business contracts each year.

- In May of 2007, the SBA went so far as to issue a press release titled, "Myth vs. Fact: SBA and Government Contracting," which stated that it is a myth that large companies, including large, multinational corporations are taking away federal contracts specifically intended for small businesses. After reviewing the data, the ASBL and both third party experts all found that the Bush Administration had in fact included billions of dollars in awards to Fortune 500 corporations and other large businesses in the United States and Europe in its small business contracting statistics. The Bush Administration falsified their compliance with the congressionally mandated 23 percent small business contracting goal by including such corporate giants as Dyncorp, Battelle Memorial Institute, Hewlett Packard, Government Technology Services Inc (GTSI), Bechtel, Lockheed Martin, General Dynamics, General Electric, Northstar Aerospace, Booz Allen Hamilton Inc. and Raytheon. (http://www.sba.gov/idc/groups/public/documents/sba_homepage/news_07-30.pdf)

- The ASBL also discovered that the Bush Administration even included hundreds of millions of dollars in contracts to large corporations in Europe such as British Aerospace Engineering Systems (BAE, British), Buhrmann NV (Dutch) and Thales (French). BAE is recognized as one of the five largest defense contractors in the world, and has more than 79,000 employees world wide. Buhrmann NV, headquartered in Amsterdam, has more than 19,000 employees and French defense contractor Thales has 52,000 employees, according to Hoovers.com.

- The ASBL also found that contracting numbers to large corporations were manipulated to make it appear as if some firms had received significantly less small business contracting awards than they had. For example, the ASBL found that according to the SBA, BAE Systems Analytical Solutions Inc. received $8.5 million in 2005 and $4 million in 2006. However, Fedmine.us indicates that BAE Systems Analytical Solutions Inc. received small business contracts in excess of $137.6 million in 2005 and $134.5 million in 2006. Fedmine.us is one of several companies with access to the XML data feed from the Federal Procurement Data System (FPDS-NG). In another example, the SBA reported that Battelle Memorial Institute received $12,801 in 2005, but data from both third party experts indicated that Battelle had actually received more than $900 million during 2005. The ASBL found a pattern where contracts to large firms were altered in the same way they were with BAE and Battelle.

- The ASBL also discovered that the Bush Administration was forced to make a systematic counter balancing increase in the volume of contracts awarded to legitimate small businesses to prevent the total amount of contracts awarded for 2005 and 2006 from being diminished. Consequently, awards to legitimate small businesses were systematically inflated to equalize the reduction of small business contract dollars awarded to Fortune 500 corporations. The ASBL found that according to SBA numbers, Circle B Enterprises Inc. received $887.5 million during 2005. However, Fedmine.us indicates that Circle B Enterprises Inc. received $287.5 million during 2005, which represents a discrepancy of $600 million. The ASBL found several other instances of significant inflation of small business contracting numbers in legitimate small businesses.

During his time as SBA Administrator, Steven Preston continually denied the fact that large businesses were the recipients of federal small business contracts. However, in June of 2007, Preston adopted the SBA's 5-year grandfathering/re-certification policy allowing some of the largest corporations in the United States and Europe to continue receiving billions of dollars in U.S. government small business contracts through the year 2012.

"Based upon a number of federal investigations that have been done on this subject, such as 5-14, 5-15, and 5-16 from the SBA Office of Inspector General and our analysis of this information, it looks like the pattern that we are seeing in 2005 and 2006 will be repeated every year during the Bush Administration. If that holds true, the Bush Administration will have diverted somewhere between $500 and $800 billion from our nation's middle class economy," President of the ASBL, Lloyd Chapman said. "It's time for Congress to call for a GAO investigation to get to the bottom of this issue. The Bush Administration has consistently tried to paint me as a conspiracy theorist. Based on the release of this data and the fact that I have won five federal lawsuits against the Bush Administration, I expect that will be a more difficult job for them in the future. I would like to see the media report this story accurately and responsibly and start listening to sources outside the SBA's press office. The facts don't lie."

The ASBL intends to continue to review the data and will release a more detailed report on their findings within 30 days. The information is now available on the ASBL's website, www.asbl.com.

Contact Information

  • Contact:
    Christopher Gunn
    Communications Director
    American Small Business League
    Email Contact
    (707) 789-9575